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Revolutionizing Financial Messaging with ISO 20022 in Dynamics 365 F&SCM

Updated: Feb 5

Understanding the complexities of financial messaging in today's digital age is crucial for finance and IT professionals, as well as those with a general interest in financial technology. This blog aims to demystify the role of ISO 20022, a global standard for electronic data interchange between financial institutions, and its integration into Dynamics 365 Finance & Supply Chain Management (D365 F&SCM).

In today's dynamic and ever-evolving financial landscape, staying up-to-date with the latest industry standards and cutting-edge technologies is vital. This blog brings you insights gained from a recent collaboration with a distinguished European client, focusing on streamlining banking processes and automating financial transactions. We'll delve into the importance of ISO 20022, a key player in the world of financial communication, and how seamlessly it fits into the framework of D365 F&SCM.

The Essence of ISO 20022

At its core, ISO 20022 is a standardized system meticulously designed to facilitate seamless electronic message exchange within the financial sector. This innovative framework incorporates a comprehensive collection of XML-based schemas, thoughtfully crafted to accommodate various types of financial messaging. These schemas provide richer references and remittance information, enhancing the quality and accuracy of shared data.

A noteworthy aspect of ISO 20022 is its widespread adoption in real-time, low-value, and high-value clearing systems globally. What sets ISO 20022 apart is its layered structure, consisting of three key tiers:

  • The top layer is dedicated to critical business processes and concepts.

  • The middle layer presents logical data models and flows.

  • The bottom layer intricately manages the syntactical aspects of the system.

A Glimpse into the Future

As the financial world continues its relentless evolution, it's increasingly evident that ISO 20022 isn't just a fleeting trend; it marks a significant milestone in our journey towards more efficient and standardized financial messaging. Industry luminaries, like Stephen Lindsay, Head of Standards at SWIFT, foretell a future where major currencies worldwide will fully embrace ISO 20022 by 2025, reaping its extensive benefits.

Benefits of ISO 20022

Embracing ISO 20022 brings a host of advantages, starting with structured data representation. This structured approach simplifies information handling, from well-defined debtor and creditor addresses to richer remittance details. Moreover, ISO 20022 ushers in the era of coded information, boosting data precision and processing efficiency. A noteworthy feature is the Unique End-to-End Transaction Reference (UETR) embedded within the payload, enhancing traceability and accountability. Importantly, ISO 20022 operates on a network-agnostic foundation, ensuring its adaptability across diverse financial platforms.

Deciphering CAMT: Cash Management at Its Core

In the world of ISO 20022, the CAMT framework takes center stage, addressing 'Bank to Customer' Cash Management reporting. It's important to clarify that, in this context, the term "customer" refers to the company itself, not individual end customers.

CAMT.054 - Shedding Light on Debit and Credit Transactions

The CAMT.054 format plays a pivotal role in illuminating payment transactions initiated by end customers. However, it's crucial to note that CAMT.054 specifically conveys information about transactions initiated by end customers, not those involving vendors.

CAMT.054 comes in various forms:

  • CAMT.054C, focusing on credit transactions.

  • CAMT.054D, emphasizing debit transactions.

  • CAMT.054B, encompassing both debit and credit transactions.

CAMT.053 - Unveiling Comprehensive Statements

On a related note, CAMT.053 serves as a comprehensive statement format, capturing payment transactions by end customers and payments made by the company to vendors. Think of it as an account statement, offering an alternative to the MT940. CAMT.053 plays a vital role in advancing bank reconciliation, especially within the framework of D365 F&SCM.

CAMT.052 - Real-time Account Insights

Finally, CAMT.052 emerges as a valuable tool, providing real-time insights into accounts. Focusing on intraday transactions recorded since the closure of the previous business day, it offers customers near-instant visibility into their accounts. Notably, CAMT.052 can generate reports for multiple accounts, streamlining the financial oversight process.

In summary, ISO 20022 and its CAMT formats serve as catalysts for increased efficiency, accuracy, and standardization in the financial realm. As the global adoption of ISO 20022 approaches, staying well-informed and prepared is crucial for navigating the ever-changing landscape of financial messaging.

Details on other Schema used in ISO 20022

Benefits of CAMT Reporting

CAMT reporting represents a pivotal development in financial data management, offering a standardized approach to global account information reporting. This standardized system relies on CAMT messages, ensuring not only enhanced data exchange but also comprehensive information transmission without truncation. The detailed reference and description information they provide for account credits and debits have the potential to significantly streamline the bank statement reconciliation process.

One of the core strengths of CAMT reporting lies in its global applicability, made possible through ISO 20022 XML standards. This harmonized approach promotes improved interoperability between financial institutions and internal ERP systems. Companies can consequently move away from managing a multitude of bank statement formats, including BAI2 (common in the US) or MT940 (widespread in most other countries), as well as various local or proprietary formats, and transition to a unified CAMT reporting standard. The ultimate aim is to empower businesses to enhance their end-to-end processes, covering everything from payments to reconciliation.


Catalyzing Financial Innovation: Diving into Dynamics 365 Integration

As we pivot towards the integration of CAMT reporting into the Microsoft Dynamics 365 (D365) environment, we transition from the broader exploration of CAMT's global benefits to the practical steps necessary to harness its potential within a specific business context. Specifically, we'll delve into CAMT.054 and its role in automating the recording of customer payments—a critical component of financial data management and reconciliation within the world of D365. This journey promises to be both enlightening and informative as we unveil the intricacies of this integration, step by step.

Automating Customer Payment Recording in D365: Prerequisites

Before we embark on the implementation journey, several prerequisites must be in place to ensure a seamless integration:

  • Up-to-Date Customer Master Database: It all begins with ensuring that your Customer Master database is current and accurate. Legal names and organizational details must be meticulously recorded.

  • Mapping Customer Bank Accounts: Within the Customer Master, at least one Customer Bank account needs to be mapped. This is the account from which you expect to receive credited amounts. Ensure that crucial information like IBAN or bank account numbers and SWIFT codes or routing numbers is accurately recorded.

  • Bank Master Setup: In the Bank Master setup, validate that IBANs or bank account numbers and SWIFT codes or routing numbers are properly configured.

  • Importing ISO 20022 CAMT.054 ER Configuration: Import the ISO 20022 CAMT.054 Electronic Reporting (ER) configuration. This can be conveniently accomplished through Microsoft Dynamics Lifecycle Services (LCS). To do so, navigate to Organization Administration and access Electronic Reporting in the workspace.

The integration journey can be summarized in a series of key steps:

Step 1: Access Electronic Reporting Repositories

  • Start by navigating to the 'Electronic Reporting' within 'Organization Administration.'

  • In the 'Workspaces' section, select 'Electronic Reporting' and click on 'Repositories' located under the 'Microsoft' category.

Screenshot showing the 'Localization configurations' section in the Finance and Operations software. This section includes options for 'Reporting configurations', 'Tax configurations', and 'Metadata configurations', with Microsoft listed as one of the configuration providers.

Step 2: Open the Repository

  • Click on 'Open' to access the repository.

Screenshot of the Finance and Operations module within an organization's administration interface, displaying the 'Electronic reporting' section. The standard view lists a global configuration repository provided by Microsoft with tenant information available.

Step 3: Download the Latest Configuration

  • Use the filtering option to find the configuration format you require.

  • Download the most recent version of the configuration.

Screenshot of the 'Configuration repository' within the Finance and Operations module, showing various electronic report formats such as 'ISO20022 Camt.054' and 'Camt.053 Format'. The interface highlights the import function, configuration names, descriptions, and version control for global electronic reporting standards.

Step 4: Link Configuration to Method of Payment

  • Once the latest configuration is successfully imported, proceed to 'Methods of Payment' within 'Accounts Receivable.'

  • Select the specific 'Method of Payment' where you intend to configure the import format.

  • Enable the 'Generic electronic import format' option.

  • You'll now find the imported configuration available for selection.

Detailed view of the 'Methods of payment - customers' section in the Finance and Operations application, outlining settings for electronic payments. It includes fields for payment method, posting, finance charges, and bank transaction processing, along with a section for managing file formats and importing bank configuration, specifically showing 'camt.054'.
Accounts Receivable> Payment Setup> Method of Payment

Optional: If needed, you can set up a mapping between the bank transaction codes in the file and bank transaction types. This step helps in identifying specific transaction details.

If the file contains transaction charges that you want to include with the incoming payment, follow these steps:

  1. Create a payment fee on the 'Customer payment fee' page.

  2. Then, on the 'Methods of Payment' page, link the payment fee with the bank account using the payment fee setup.

With these setup actions completed, you're ready for the next step: creating a customer payment entry.

Step 5: Create a new customer payment journal.

Click Functions > Import payments.
User interface of the Finance and Operations software showing the Customer payment journal section. The highlighted tab 'Functions' displays options for posting and transferring, generating payments, and importing payments. The screen is part of a routine financial management and transaction processing workflow.

Step 6: Choose the Payment Method

Select the 'method of payment' with the required settings for the ISO20022 camt.054 format.

Interface snippet of the 'Customer import payments' feature within a finance application, displaying a dropdown for selecting the 'Method of payment' with 'Electronic' currently chosen.

Step 7: Provide Required Parameters and File Path:

  • Enter the necessary parameters and specify the file path.

  • Click 'OK' to initiate the import process.

It's important to fill in the 'Error account customer.' This account serves as a safety net, especially when dealing with entries credited from unmapped bank accounts. In such cases, this account acts as a "Suspense account," ensuring a smooth import process without errors.

Screenshot of an 'Electronic report parameters' interface showing options for bank account details, settling transactions, and other financial settings. Highlighted fields include a bank account number, an error account customer code, and an option to upload a file named 'camt_054_credit_noti...'."

Step 8: Create Lines and Post:

  • The system will generate the required lines.

  • Proceed to post them for final processing.

Towards a Smarter Financial Future

As we reach the conclusion of our exploration into the dynamic world of financial messaging, the integration of ISO 20022 with Dynamics 365 Finance & Supply Chain Management stands out as a beacon of advancement. This powerful synergy not only exemplifies technological innovation but also heralds a new era in financial data management and transactional efficiency. For professionals navigating the intricate corridors of finance and technology, this integration is not just an enhancement; it's a transformative journey towards more accurate, transparent, and streamlined financial processes.

The future of financial communications is bright, and it's being written now, with ISO 20022 and Dynamics 365 F&SCM at the forefront. As we continue to witness the global adoption and evolution of these technologies, staying informed and adaptable will be key to leveraging their full potential. Join us on this journey of discovery and innovation, where every step forward is a stride towards redefining the financial landscape of tomorrow.

Partnering with Excellence: Copperpod Digital, Your Microsoft Ally


Copperpod Digital, a dynamic leader in the Digi-tech industry since 2022, stands out as your trusted Microsoft partner. Headquartered in the US and with a strong presence in India, we specialize in Dynamics 365 and Azure, delivering innovative solutions tailored to your business needs.

As a Microsoft partner, we are dedicated to empowering your journey in the digital landscape with expert integration and customization in Dynamics 365, ensuring your business excels in today's fast-paced digital world. Choose Copperpod Digital, not just as a service provider, but as a strategic partner in navigating and mastering the Dynamics 365 ecosystem.

Until Next time!

Thank you for reading our blog! We hope you found the information informative and helpful. We're always looking for ways to improve, so please let us know if you have any feedback or questions. In our next blog post, we'll be diving into other intricacies of D365 F&SCM. Stay tuned!

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